Hong Kong stocks snap two-day drop as they track new highs on Wall Street amid stimulus package progress

Hang Seng Index closes 0.8 per cent higher at 26,502.84, ending two days of declines

Shanghai Composite Index slumps most in two weeks after a decline in consumer inflation prices raises concern about the sustainability of the economic recovery

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The Shanghai Composite Index posted the biggest decline in two weeks on concerns over the economic outlook after consumer prices in November fell for the first time in more than a decade. Photo: EPA-EFE

Published: 10:37am, 9 Dec 2020Updated: 4:51pm, 9 Dec 2020

Hong Kong stocks rose for the first time this week, taking cue from a Wall Street rally that propelled a US benchmark to a record high, as hopes emerged in Washington for a fresh stimulus package to combat the economic fallout of the coronavirus pandemic.

The Hang Seng Index gained 0.8 per cent to 26,502.84 on Wednesday, snapping a two-day losing streak that was spurred by strained China-US ties and rising Covid-19 infections.

Other major stock gauges in the Asia-Pacific region rose as well except China, with benchmarks in Japan and South Korea climbing at least 1.2 per cent.

The S&P 500 rose 0.3 per cent to an all-time high overnight. US Senate Majority leader Mitch McConnell suggested setting aside some issues that have been blocking a relief package – a strategic retreat aimed at striking a deal, while Treasury Secretary Steven Mnuchin presented a new US$916 billion relief proposal to House Speaker Nancy Pelosi.

“With the markets starting to exhibit some year-end fatigue, any stimulus … will come at a most welcome time and ensure that well-subscribed equity markets will cross the year-end finishing line on a positive note,” said Stephen Innes, a strategist at Axi.